As we enter a more connected world, where devices talk to each other and make sense of the masses of data we create, the issue of how much control we have over this process becomes more important.

Location-based technology has come a long way in a short time. Virtually everyone in the UK carries a mobile phone which can increasingly pinpoint our location to within 100m.

Satellite navigation devices continue to fly off shelves as we are persuaded to ditch the unwieldy map on dashboard approach
to navigation in favour of a calm computerised voice.

Increasingly, mobile phone companies are offering location-based services to allow users to find restaurants and other amenities via their phones. Smartcards, such as Transport for London's Oyster card, are allowing us to travel without the need to fiddle for small change.

While all of these technologies are hugely convenient, they are also becoming our very own pocket-based stalkers.

The need to balance the convenience of new technology while preserving our privacy formed the subject of a debate between privacy experts in London this week.

Grassed by your sat-nav

"Three-quarters of us have our whereabouts known by mobile operators and, by extension, law enforcement. It is seen as a necessary evil and so far the explicit use of location data has been limited to high-profile court cases," said one of the panellists, Jonathan Raper, professor of geographic information science at City University, London.

While satellite navigation systems are currently stand-alone systems for our own personal use, imagine a scenario where satellite navigation companies offer traffic or speeding transgressions to the police without consulting the owner of the device.

"Then ask yourself, whether you are concerned about privacy?" said Mr Raper.

It is not just offline activities that can be mapped. Where we go on the web has become one of the most traceable of all our footprints and we routinely give out personal information which in turn creates vast data trails.

Online, people are increasingly willing to share data, from geographical information for projects such as OpenStreetMap, to highly personal videos of themselves on MySpace.

Microsoft as privacy leader?

It is very easy to collect all of our data and the fact that it is there means governments will come up with a good list of reasons as to why they need access

Caspar Bowden, Chief Privacy Advisor, EMEA Microsoft

The desire to share such information has led some to question whether anyone really cares about privacy online.

They should, said Ian Brown, privacy advocate and senior research manager at the Cambridge MIT Institute.

"US college students may enjoy putting up videos of themselves on MySpace but when the authorities start digging through and potential employers look at MySpace profiles they might start thinking that they care about their privacy after all," he said.

"It is easy to design invasive technology but we have to start looking at ways to make technology privacy-friendly too," he added.

Privacy advocates had found an unlikely ally in Microsoft, said Mr Brown.

Microsoft has not always been concerned about privacy. Its Passport system, now known as Live ID, was designed as a unified login service, envisioned by the software giant as a single-point of entry to web commerce.

It allowed users to logon to many websites using a single account but the fact that it also created a vast database of information on those who joined drew criticism from privacy advocates and users.

"Is Microsoft a country now it is issuing passports?" was one comment at the time that summed up disquiet about the scheme.

Now Microsoft is keen to put privacy at the heart of its projects. Its chief privacy advisor Caspar Bowden is the former director of the Foundation for Information Policy Research and, in the past, an outspoken critic of governmental and corporate invasions of privacy.

He outlined Microsoft's plans for an identity layer for the internet - what Microsoft is calling an identity metasystem.

Central to this metasystem will be Windows CardSpace, a means of identifying yourself online which will be available in the next version of its operating system, Windows Vista.

The identity system will require websites or CardSpace-enabled applications to obtain permission from users before personal data is used.

Importantly, the data is shunted around piecemeal so that only the necessary amount of information would go to organisations wanting to do business with you, explained Mr Bowden. The system will also help users eliminate spam.

Convenience versus anonymity

An Oyster card can be anonymous

Mr Bowden's enthusiasm for the need for privacy online may not be shared by those who are unconcerned by their data trails.

"There will always be about 10-20% of the population who see absolutely no need for privacy," conceded Mr Bowden.

"But for most of us there are areas of our lives which we want to keep reserved for a group of trusted people and that is why we need rules to define what we need from privacy," he said.

Understanding how data can be used is important so that people can make informed choices about how their information is used.

"Data storage is so cheap. It is very easy to collect all of our data, and the fact that it is there means governments will come up with a good list of reasons as to why they need access. Data mining makes it easy for people to nose around in your data," he added.

But remaining anonymous in a connected world is hard even for the most hardened of privacy advocates.

"I didn't want people to know what journeys I was making using my Oyster card so I paid in cash to have it topped up, keeping it anonymous. Then one day at Heathrow, with limited time and a big queue I found myself paying by credit card and a connection was made," said Mr Brown.

The balance between privacy and convenience is not always an easy one to maintain.